• search

Oil up on Nigeria, but U.S. supply, rate talk weigh

Written by: Staff

TOKYO, Feb 24 (Reuters) Oil prices edged back up on Friday as worries over disruptions to Nigerian exports resurfaced, eclipsing support from rising inventories in the United States.

U.S. crude rose 34 cents to .88 a barrel, trimming the previous session's 47-cent loss on ample U.S stockpiles.

But the Nigerian crisis was stirring more concerns on London's Brent crude market which traded up 31 cents at .85, after gaining 10 cents on Thursday to end at .54, on par with the U.S. West Texas Intermediate (WTI) crude futures.

''Brent looks bullish, gaining strength from Nigeria's unrest. It is very rare to see spreads between WTI and Brent flattening,'' said Keiichi Sano, manager with the commodities business unit at Sumitomo Corp. in Tokyo.

U.S. crude usually trades higher than Brent, which is used to price West African crude and so is reflecting more of a risk premium to the Nigerian disruptions.

In Nigeria, the world's eighth-largest crude exporter, militants on Thursday threatened to attack more oil installations in the next few days.

Militant sabotage attacks to oil facilities in Nigeria have already disrupted a fifth of its exports.

Traders said Iran's nuclear ambitions and the possible ramifications for the nation's oil production remained a worry.

The board of the International Atomic Energy Agency (IAEA) meets on March 6 to discuss the next step in resolving Iran's nuclear row with the West.

Iraq, which has been struggling to get oil output back to pre-war levels, is suffering the worst sectarian violence since the fall of Saddam Hussein, compounding the geopolitical risks in the Middle East.

SPECULATIVE FUNDS U.S. oil prices remain pressured after U.S. government data showed brimming oil stocks increased further last week.

''The prompt WTI contract seems the weakest in the international oil index, weighed down by immediate high inventory levels in the United States,'' Sano said.

Gasoline stocks rose to 225.6 million barrels, the highest level in seven years. Commercial crude stocks rose 1.1 million barrels, in line with forecasts, to 326.7 million barrels, up 29.5 million barrels from the same time last year.

Oil traders said they were also keeping a close watch on what fund investors would do in the face of renewed concerns over rising interest rates, which could slow demand growth for commodities.

''Moves of speculative money will have a significant impact on oil prices and they will use rates as an indicator for investment decisions,'' a trader with a financial firm said.

On Thursday, Philadelphia Federal Bank President Anthony Santomer said U.S. rates were close to neutral and the central bank should keep them in a neutral range, giving further hints that their 20-month interest rate hiking drive is near an end.

But Dallas Federal Bank President Richard Fisher said he would want to be sure that inflation was under control before ending the monetary policy tightening campaign.


For Daily Alerts

For Breaking News from Oneindia
Get instant news updates throughout the day.

Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more